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Tuesday, April 1, 2014

Content vs. Platform: The Battle of the Titans

Friday, March 9, 2012

The first few months of 2012 were rich in events in the ongoing battle between content owners and Internet players. This battle, seemingly unimportant at first glance, if put into a larger context can be described as one of the most pivotal challenges in our digital society and will define the survival of the Internet and future of the digital planet as we know it.

Three events could be extracted from recent news to illustrate the current state in the battle between “the content and the platform,” a battle of the titans.

"This criminal case, more than two years in development, shows that law enforcement can take strong action to protect American intellectual property stolen through sites housed in the United States" — Christopher J. Dodd, Chairman of the MPAA and former US Senator [Jan 20, 2012]

The third and last key event in the battle between the content owners and the platform providers came from the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) online protests on Jan 19, 2012. For years, the recording industry, Hollywood studios and major publishing houses (Pearson, Cengage Learning, McGraw-Hill, and Houghton Mifflin Harcourt) have pressed Congress to act against offshore websites that have been giving away their content for free. In October 2011 SOPA (in the House) and PIPA (in the Senate) were introduced to address this major issue. The bills, written essentially by movie studios and record labels (Universal/EMI, Sony/BMG, Warner) aimed to halt the spread of copyrighted content on the web by taking the names of the piracy-accused websites from the DNS directory (equivalent to a “website shut down”) and forcing payment processors to halt money flowing to these websites on court order, based solely on an accusation (“guilty until proven innocent”) [see SOPA 101 for a more detailed explanation].

"Those who count on quote 'Hollywood' for support need to understand that this industry is watching very carefully who's going to stand up for them when their job is at stake. Don't ask me to write a check for you when you think your job is at risk and then don't pay any attention to me when my job is at stake." — Christopher J. Dodd, Chairman of the MPAA and former US Senator [Jan 20, 2012]

The core argument of US copyright owner representatives such as the MPAA, IFPI or the Recording Industry Association of America (RIAA) have always been that the unique problem in the entertainment industry is piracy, and the only avenue to fight against piracy is through legal means.

Today's stories reveal a new spin in this ongoing claim. US copyright owners are now moving the fight to the international arena (Sweden, Hong Kong, New Zealand), with the support of the US government bodies such as the FBI and the Department of Justice. It also reveals that content owners are continually pushing for more restrictive, internationally recognized and expeditious laws in US to confine the propagation of content over the Internet. More importantly, it finally shows that such legislation is unilateral and done behind closed doors with the hope of being approved under fire, before a US election, just in time to raise campaign money. It is also important to note that current legislation is sufficient to address piracy on a world stage (MegaUplaod.com in New Zealand), and there is no need to push for a more restrictive set of laws.

This is not the first time that Hollywood representatives have argued that new technology would threaten their entire industry and kill thousands of jobs. In fact, with each new technology evolution (cable, VCR, DVD, DVR, and now the Internet), Hollywood tried to shut down the innovation and/or distribution channels through legislation and the courts.

“VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” – Jack Valenti, President of the MPAA [April 12, 1982]

In reality, each innovation has opened up a new market for Hollywood, to the point that today these threatening innovations bring more revenue than the original core business of movie making and distribution. The all-time high 2010 worldwide box office revenue (US$31.8 billion) represented only one-third of the total film industry revenue (US$87.4 billion), the rest from DVD's, merchandizing, promotional events, etc. The movie and music industries have been consistently wrong in saying that technological innovation would end their businesses. In each evolution, the new technology created a new market far more profitable than the previous ones. In reality, what these content owners are fighting for today is to have the right to capture the profit of a new technology called Internet. And to do so, Hollywood and Music Majors have decided to move one step beyond in its legalization of the content distribution.

Back to the Future

Today the US is using the Digital Millennium Copyright Act (DMCA), which is a copyright law implemented in 1996 under the World Intellectual Property Organization (WIPO). European Union is using the equivalent called the European Union Copyright Directive (EUCD). These sets of laws criminalize production and dissemination of technology, devices, or services intended to circumvent measures (commonly known as digital rights management or DRM) that control access to copyrighted works. On Oct 28, 1998, the DMCA was amended (Online Copyright Infringement Liability Limitation Act, or OCILLA) to extend the reach of copyright, while limiting the liability of the providers of online services for copyright infringement by their users. OCILLA created the notion of “safe harbor” against copyright liability if, online service providers block or remove access to allegedly infringing material upon notification. In short, OCILLA relieved online service providers from policing the content and forced copyright owners to monitor the Internet. This balance of forces has been at play for the past decade, but had been resented by copyright owners as unfair.

On Oct 01, 2011, Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea and the United States signed the Anti-Counterfeiting Trade Agreement (ACTA), a multinational treaty for the purpose of establishing international standards for intellectual property rights enforcement. The EU and its 22 members signed ACTA on Jan 26, 2012, bringing the total number of signatories to 31. No signatory has ratified the agreement yet, and the trade agreement is under scrutiny at the European Court of Justice over possible rights violations. ACTA was originally designed to be a "coalition of the willing" which "would aim to set a 'gold standard' for IPR [intellectual property rights] enforcement among a small number of like-minded countries, and which other countries might aspire to join” – Tokyo Embassy, from Wikipedia Cable [Feb 3, 2011].

ACTA is not the only trade agreement that tries to regulate copyright infringements. The Trans-Pacific Partnership (TPP) is also a multi-nation trade agreement that tries to control intellectual property laws around the world. The secretive negotiations between the US, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, and Brunei aim to eliminate 90% of all tariffs between member countries by 2006, and reduce all trade tariffs to zero by 2015. The treaty also has a controversial provision over intellectual property, far more restrictive than previous agreements and laws. A leaked version of TPP agreement indicates that negotiators are pushing for eliminating any possibility of parallel trade in copyrighted content, criminal enforcement, legal regime of ISP liability, legal incentives for service providers to cooperate with copyright owners, identifying Internet users for any ISP, and adopting compensation for infringement without actual damages. Like ACTA, the TPP is being negotiated rapidly with little transparency and many US representatives have voiced concern about it.

A more appealing argument and endeavor would be to estimate the real cost of piracy to the economy. The Institute for Policy Innovation, a conservative think tank tied the Motion Picture Association, estimated that major US movie companies lost US$6.1 billion in 2005 to piracy. The OCDE estimated also in its “The Economic Impact of Counterfeiting and Piracy” report that in 2005 international trade in counterfeit and pirated products altogether could have been up to US$200 billion. Of course these numbers are biased and cannot be taken as a base for objective discussion.

Pirated content consumes almost 24% of the world bandwidthSource: Envisional Ltd [Jan 2012]

Recently, the British market intelligence company Envisional presented its State of Digital Piracy Study, in which it showed that piracy is diverse (cyber-locker, file sharing, streaming video, and BitTorrent), regionally specific (Russia is BitTorrent heavy while Brazil is cyber-locker serious) and touch all content types (picture, film, TV, music, game, software, video, and books).

There is little evidence today that piracy is hurting Hollywood dramatically and that copyright infringement is responsible for all the problems the entertainment industry is facing. A recent study by Sweden's Internet Infrastructure Foundation shows that a larger percentage of file sharers actually pay to download individual songs, than those who do not share files [Nov 18, 2011]. There is no evidence either that BitTorrent piracy hurts US box office returns [University of Minnesota and Wellesley College, Jan 16, 2012]. And counterintuitively, online pirates could be the music industry’s most valuable customer, and some major content creators have already mentioned that piracy could be treated as a new form of viral marketing or used as a marketing research focus group.

“Piracy is the new radio. That’s how music gets around. That’s the real world for kids” – Singer and songwriter, Neil Young [Jan 31, 2012]

At the core Hollywood and Internet have based their success on opposite business models. While Hollywood instigates scarcity, high price, staggered schedule and controlled distribution model, the Internet is ubiquitous, pervasive, instantaneous and has zero marginal distribution cost.

Despite all the noise Hollywood is making around piracy, the paying consumer decline is essentially due to scarcity and high price strategy. Piracy is a mere consequence of the lack of availability and affordable price of Hollywood movies around the world. With strong competition from TV, cable and Internet but also from other entertainment options (live shows and sports), moviegoers are moving away from this traditional media. And to make matters worse, the costly 3D bet taken a few years back has not save Hollywood from its ultimate faith. Hollywood has no choice but to seriously embrace and invest in new available technologies if it wants to reach out to its full consumer base. Many Internet-based businesses such as Spotify, NetFlix, Tivo, iTunes, Hulu, and even Facebook have successfully distributed content, and are flourishing today as successful digital content ventures.

“First they ignore you, then they laugh at you, then they fight you, then you win.” – Attributed to Mahatma Gandhi with no known citation

If Hollywood wants to be part of its consumers' future it has to adapt to their needs: “what I want, when I want, where I want and on the device I want”. To be relevant Hollywood has to stop thinking short-term and change its content copyrighted mindset. The six big studios (Paramount Pictures, Warner Bros. Pictures, Columbia Pictures, Walt Disney Pictures/Touchstone Pictures, Universal Pictures and 20th Century Fox) have to embrace the Internet distribution channel and build adequate platforms to give its consumer base the ability to use, edit, comment and consume its rich and high quality content.

“The only way to control your content is to be the best provider of it” – NRK, a Norwegian Broadcasting Company [Mar 26, 2008]

Jan 19, 2012, was the first time in history the online community pulled together a unified voice to put a halt against SOPA and PIPA. Hollywood needs to see that big money spent on lobbying efforts is becoming less relevant than listening to its consumer base and going where they already are. The Motion Picture Association needs to sit down with Silicon Valley to invent the next entertainment evolution together, or it will disappear swallowed by the digital world.

Top 10 Days in 2011 for Technology

Friday, December 16, 2011

The year-end holiday season always seems like an appropriate time to reflect on what happened during the past year. While the Middle Easterners are taking their political future into their own hands, Europeans seems to have given up their economic future. The US is gearing up for its election year and the rest of the world continues to fight what the economic analysts have named the stagnation years.

In the technology world, 2011 was an unusual year with surprising consolidations, unexpected cross-market acquisitions and new multi-dollar IPOs. Here are the top 10 game-changing days for 2011 in the technology world, in order of their appearances.

March 20, 2011: AT&T (tries to) acquire T-Mobile USAWith T-Mobile, AT&T was not just buying a rival but buying 5 years' worth of infrastructure development and a customer-friendly company in the market. In a single move AT&T managed to snag the only sizable competitor that could be integrated rapidly and have a high return on investment immediately on the acquisition completion date. Recently, the two companies took back their original merger application after the FCC chairman came out against the US$39 billion deal. Instead the two companies will seek approval from a federal judge, and will file another FCC application in early 2012. In the end, the long regulatory battle might see the last big telecommunications consolidation in the US, and the colossal breakup fee (US$3 billion) might be remembered as an minor footnote in the world of M&A.

May 10, 2011: Microsoft acquired SkypeWith this US$8.5 billion cash deal, Microsoft consolidated its leadership position in the Unified Communications space in the enterprise market, and peer-to-peer communication in the consumer market. The Redmond-based company is finally putting to use US$42 billion out of the US$50 billion of its overseas cash reserve, avoiding the 30% repatriation tax rate. This expensive acquisition (the largest in Microsoft’s 36-year history) may seem costly today, but if the company manages to create a new, seamless communication experience across multiple screens (TV, Mobile, and PC today; plus Tablet tomorrow), this deal could be seen in retrospect as the best move Microsoft could have made in the lucrative global telecommunications industry with its trillion US dollar revenue per year. One hurdle is for Microsoft to assuage all its carriers and telecommunications partners around the world, that Skype is not a major competitor.

May 19, 2011: LinkedIn went publicFrom its initial public offering on the New York Stock Exchange (symbol: LNKD), LinkedIn raised US$352.8 million, offering 7.84 million shares (8.3%) of its total 94.5 million shares. After 3 years of low activity in the IPO market, LinkedIn kick-started of a new era of the social media IPO tsunami. Looking at the buzz surrounding the most stable and less risky of all “Big Five” IPO contenders (LinkedIn, Facebook, Twitter, Groupon and Zynga), investors are eager to jump on the next band wagon. Today investors prefer remembering Google and Apple stock prices rather than the Dot Com bust to make their decisions. Tech IPOs are back.

August 15, 2011: Google acquired Motorola Mobility Holdings Google's ambition of reaching the most mobile devices on the planet has been reached and this day Google achieved what it wanted when it initially ventured into the mobile space four years ago with Android OS: to establish its name, credibility and loyalty with consumers. It is now time to convert this massive market share into a more steady revenue. Android generated US$5.90 per user in mobile advertising in 2010. But the figures are still pale compared to selling high-end phone devices (e.g., Apple makes US$370 profit for every iPhone sold). The Mountain View company has yet to find the next billion dollar revenue stream, as 97% of Google’s revenue is from advertising. With the Motorola Mobility acquisition, Google just entered a new billion-dollar business with a strong brand name. The mobile handset manufacturing business could be an interesting add-on to the core advertising business, if tighter development and integration could be done between software and hardware, somewhat like Apple. Whatever Google chooses to do with the US$12.5 billion Motorola Mobility acquisition, now it is the only mobile company that might be able to compete globally with Apple head-to-head... at least until the Windows-Nokia reboot, if all goes well.

September 6, 2011: Yahoo! fired its CEO Yahoo! Chairman Roy Bostock fired CEO Carol Bartz. Bartz's reign lasted 32 months. CFO Tim Morse has stepped in as the interim CEO, while the company is still in search for a permanent leader (some people have already denied wanting filling the CEO position). Yahoo is currently evaluating a bid led by Silver Lake Partners and a rival proposal from TPG Capital for minority stake position in Yahoo! capital. Chinese e-commerce giant Alibaba (in which Yahoo! has 40% stake) and Japan’s Softbank Corp. (in which Yahoo! has 35% stake), are also interested in a deal with Yahoo! So 2012 might just be the year when Yahoo! gets sliced up.

September 22, 2011: HP also fired its CEOHP Chairman Ray Lane announced that the board of directors has appointed Meg Whitman as HP President and CEO. Léo Apotheker stepped down as president, CEO and Director of HP. Apotheker's reign lasted less than 10 months. HP tried multiple times to rejuvenate its splendor in naming CEO's with impressive résumés and proven competence, but have ultimately failed to raise its low share price, exposing itself to hostile take-overs. Such is a large corporation's life (and its CEOs too) in modern capitalism, to live and die by quarterly numbers.

October 6, 2011: Steve Jobs passed away Only a few days after stepping down from his CEO position at Apple, the company he co-created over 40 years ago, Steve Jobs died. More than a CEO, a founder or an innovator, he was seen as the ultimate visionary that could make dreams come true and set the standard for beautiful, functional, user-centered devices. The industry lost a unique icon known for relentless pursuit of perfection and pushed the boundaries of an entire industry. If there was only one day to remember in 2011 in the technology world, it would be this day that Steve Jobs left us.

November 4, 2011: Groupon went publicGroupon Inc. raised US$700 million in exchange of 30 million shares (or 5% of the company's common stock), which was the largest IPO by a US Internet company since Google raised US$1.7 billion in 2004. Groupon Inc., which has over 100 million subscribers in 45 countries, sells Internet deal-of-the-day coupons for everything from spa treatments to restaurant discounts. Prior to its IPO, the “world's fastest growing company” was put under severe scrutiny from the Securities and Exchange Commission for its accounting practices. Some analysts also claimed that the company that once turned down a US$6 billion offers from Google, operates like a Ponzi scheme. According to its IPO documentation, the Chicago-based company has publicly disclosed that while it was losing approximately US$100 million per quarter, the company decided to use its later investors' money to pay off earlier investors and founders (US$940 million from the US$1.12 billion VC money). Despite all the pre-IPO negative press and mismanagement, Groupon managed to stabilize its share price to its original US$20 public offering, just in time for the holiday season.

December 9, 2011: HP’s webOS goes Open SourceAfter deciding to finally keep its PC business in house, HP announced that it will give away the webOS (OS created by Palm, and bought by HP for US$1.2 billion earlier last year) to the open source community. This surprising news is in fact a perfect move in the current OS war. Since Android, now tied to a handset manufacturer (Motorola), faces increasing complaints from manufacturers and possible patent attacks from competitors, webOS appears to be the next clean open source OS contender. With this move, HP is positioning itself as the front lead for the next multi-screen-one-OS strategy, leading the path to other manufacturers for mobile, tablet, printers and maybe… PC. And all of that with no resource commitment.

In this year of economic crisis and political instability, the few winners in the technology space have been a small handful of internet start-ups who managed their way up and out well with impressive IPOs (with more to come next year). Similar to 2009 and 2010, the few large multinational companies with their deep cash reserves, expanded into new businesses while leaving behind their competitors. And it is tough at the top of these global corporations, where CEOs can be fired by Wall Street. NQ Logic is looking forward to seeing you in 2012.

Happy holidays to everyone.

Long Boards, Short CEO's

Friday, October 7, 2011

Rarely has the causality principle (“the same cause produces the same effect”) been more true in the technology world than in the past few weeks. Two very different multinational companies fired their CEO's for the same reason: under-performing stock price.

“On behalf of the entire Board, I want to thank Carol for her service to Yahoo! during a critical time of transition in the Company's history, and against a very challenging macro-economic backdrop. I would also like to express the Board's appreciation to Tim and thank him for accepting this important role. We have great confidence in his abilities and in those of the other executives who have been named to the Executive Leadership Council.” – Roy Bostock, Chairman of the Yahoo! Inc. board of directors [Sept 06, 2011]

On September 22, 2011 Chairman Ray Lane announced that HP board of directors has appointed Meg Whitman as president and CEO. Léo Apotheker stepped down as president, CEO and director of HP. Apotheker's reign lasted less than 10 months.

“We very much appreciate Léo’s efforts and his service to HP since his appointment last year. The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company’s strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance.” – Ray Lane, Executive chairman of HP board of directors [Sept 22, 2011]

The troubled realities and problems are in fact much deeper and have long rooted explanations than what is mentioned in these companies' official statements. A closer look at the past few years’ of company histories should be done to understand their situations.

The Yahoo! Way

Yahoo! Inc. is an American internet corporation. Founded in California by Jerry Yang and David Filo in January 1994, the company was incorporated on March 1, 1995. The web site started out as a hierarchical directory of other websites, and was named "Jerry and David's Guide to the World Wide Web" but eventually was renamed Yahoo!, acronym for "Yet Another Hierarchical Officious Oracle”.

The iconic company is best known for being a leading web content provider, and one of the few survivors of the dot-com era alongside eBay, AOL and Amazon, but throughout its history it has always had trouble in stabilizing its revenue stream and finding great CEO's.

As her first significant strategic move, HP announced its merger with Compaq on September 4, 2001 for U$25 billion in stocks after a very lengthy and costly fight. This move was considered at the time to be the biggest merger ever in the ICT industry and a most risky acquisition. Unfortunately, the legendary HP was beginning to struggle in the competitive hardware PC business. Squeezed by IBM on the high end and Dell on the low end, HP (now with Compaq) could not satisfy their investors with their low profits. Ultimately, Fiorina, the mastermind behind the Compaq acquisition, was fired by an impatient HP board. Fiorina walked away with a U$21 million check on February 10, 2005.

Although Yahoo! and HP are very different, they are sharing the same pain in current embattled times: a declining and dangerously low share price exposes them for hostile take overs. Both boards tried multiple times to rejuvenate their splendor in naming CEO's with competence and impressive résumés, but have ultimately failed.

A few conclusions can be drawn from these two similar stories, and can be extrapolated to other troubled technology companies:

Boards are more transparent. In the past, it was quite rare that board room discussions were leaked to the mass media. Today the internet, the media outlets and attitudes regarding board authority have rebalanced the information asymmetry. More and more often, troubled technology company board discussions surface to the public knowledge as a new 'transparency' tactic to influence the inside vote or outside opinion. Unfortunately this tactic only brings confusion to the public, accelerates the downward spiral, and boards are becoming more nervous about their decisions and their consequences.

Boards have less time. Business cycles in the technology industry have accelerated over the recent decades and companies that used to think in years, have to think in months (if not days). This acceleration has drastic consequences, leading to today's common crisis in board rooms. Boards, and even more so CEOs, are now on a quarterly probation. Moreover, in this unstable economic period of speculative uncertainty, where investors with large clout and capital are trying to find a safe haven at any cost, stock prices are extremely volatile, immediately reflecting (and reinforcing) the level of faith in technology company's announcements. So rather than having a longer perspective for the company's role in the technology marketplace, investing in R&D, making bold bets, most troubled technology companies are using "leading from behind" strategy as an excuse in their lack of guts, anticipation and judgment.

Boards pay too much attention to stock prices. In choosing to focus too much on stock price and short-term results, rather than financial stability and delayed pay-offs for long-term investments, boards have turned away from their main responsibilities. Troubled technology companies are now confusing the incremental measurement of their efforts with their ultimate strategy (See Meg Whitman's compensation structure, which is solely based on share price performance). Making acquisitions with some 'synergies', loosely connected to a vision, have become a quick way to make over their financials and market perceptions for the next few quarters.

Boards do not anticipate end-of-growth stage.Regularly technology companies hit a wall of growth and cannot expand beyond their current stage for various reasons: geography, customer segment, end of product life, disruptive technology, regulations, etc. Then it is time to divest part of the companies' business, and consequently dilute their market cap and stock price. Very few boards have the fortitude to formulate, execute and support such a strategy (e.g., IBM selling their PC business to Lenovo in 2004). Troubled technology companies typically hold on to their end of life product/service and end up becoming a "too big to fail" company with a mixed portfolio and message. This ability to foresee market reactions both at the beginning and the end of a product/service life is indeed a rare and a unique capability of the boards (e.g., Apple, Google, IBM).

Boards do not always make a good CEO succession plan. Troubled technology companies always choose an outsider as their new company CEO in the hopes that an external leader could lead them to fresher insights and a faster recovery. Unfortunately, a steep learning ramp-up period, mistrust of the senior leading team and disengagement toward current strategy have been the more standard results of the initial shock therapy (quite the opposite of the insider CEO approach).

It is unfortunate that market leaders such as Yahoo! and HP are in such a despair but their boards certainly own a large part of that responsibility. It should not come to anyone's surprise that after having created much value for shareholders, companies can also destroy value for them. Such is a company's life in modern capitalism.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple.” – Steve Jobs, ex-CEO of Apple [Aug 24, 2011]

In his first email to Apple’s employee as the newly appointed CEO, Tim Cook stated that he was excited to pursue Steve Jobs' vision in bringing innovation to market, and will keep the magical component of the company intact.

“I want you to be confident that Apple is not going to change. I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.” – Tim Cook, new Apple CEO [Aug 25, 2011]

Though long anticipated, the news still sent a shockwave to the entire media world. Twitter, the blogosphere and the online media outlets relayed the information for non-stop over several days.

2.5% of Twitter's worldwide traffic was about ‘Steve Jobs’
on August 25 according to Trendistic.com [Aug 25, 2011]

Praises, anecdotes, remembrances, company history and Thank you notes circulated on the digital planet at the speed of light. The formidable echo chamber around the world that followed the announcement was closer to an interplanetary rock star obituary than another American CEO entering pseudo-retirement. Once again Apple PR machine managed to acquire the attention of the whole world for few days.

He joined Apple in 1998. During his early tenure as supply chain guru, he closed many of Apple’s production factories in California and outsourced manufacturing to suppliers in Asia. He later became COO in 2007. As COO, Tim Cook was responsible for all of the company’s worldwide sales and operations, including end-to-end management of Apple’s supply chain, sales activities, and service and support in all countries.

Before joining Apple, Tim Cook was VP of Corporate Materials for Compaq and was responsible for procuring and managing all Compaq product inventory. Previous to that, he was COO at the Reseller Division at Intelligent Electronics. He also spent 12 years with IBM, most recently as director of North American Fulfillment where he led manufacturing and distribution functions for IBM’s Personal Computer Company in North and Latin America.

It was quite clear for some time that COO Tim Cook was the guy in charge at Apple. During the medical leaves that Steve Jobs took in recent years, Tim Cook successfully stepped in, showing to the Board, the company and investors that he would be the natural candidate when Jobs' replacement was duly needed.

Investors have digested the message and the Apple Inc. stock was up by over 8% (see above graphic), a week after the announcement. Pros and Cons of the news are still being debated by the investment community, and no firm judgment has emerged since the departure of Steve Jobs, which is still good news for the Cupertino-based company.

Rather than looking forward, for once it could be interesting to investigate Steve Jobs’ legacy. Apple is a singular company in the business world. It would be too easy to summarize Apple's success story with few delightful facts, some sparkly quotes or through its founder's life story, but in reality Apple was built over 35 years as a phenomenal technology company. The technology world as a whole would have been very different without Steve Jobs as a CEO at Apple.

Few important lessons from the Apple success story can be drawn here.

Second Chances. It is very rare, but a technology company can have a second chance. Steve Jobs who founded the company in 1976, retook the CEO position in 1996 after being fired in 1985. At the time Apple was on the brink of bankruptcy. After a difficult turn around Apple came back to profitability years later, and has prologue its extraordinary success story since then.

Star-ification of Founder-CEO in the Tech World. Similarly to Bill Gates, Steve Jobs has been on the technology map for years as a a founding father of the digital revolution (Gates vs. Jobs video). After Bill Gates retired from Microsoft in January 2000, Steve Jobs was the last pioneer of that generation with worldwide profile. Since then many more names have erupted from the technology landscape such as Michael Dell (Dell Inc.), Jeff Bezos (Amazon), Larry Page and Sergey Brin (Google), and most recently Mark Zuckerberg (Facebook). Though no one in that short list garnered the media frenzy and adoration as Steve Jobs, surely someone else will step up.

Technology For Everyone. Until recently, the technology world was defined, understood by and built for the gadget-loving, computing enthusiast community. The cutting edge products were more for the geeks,who were clearly a separate and distinct segment from the rest of the human beings. Steve Jobs, by designing elegant and intuitive objects, has proven that technology could be understood and used daily by people who do not come from a technological background. As long as the object in question was simple to use, designed with taste, and with high reliability and quality, a certain sizable niche of the population (the more affluent however) could understand what that machine can do for it.

Importance of a Team of Experts. Although he was the most iconic person of the company, Steve Jobs could not have done it by himself. When he returned to Apple in 1997 after an absence of 12 years, Apple already had Jony Ive as Chief Designer, and Philip Schiller, who eventually became Senior VP of Product Marketing. Over the years Steve Jobs created a team of experts that worked well together. Today Apple’s management team is considered to be the world’s reference in the consumer electronic goods.

Think Big, Think Ecosystem. It was true for the iPod and the Music industry, the iPhone and the Telecommunication industry, the iPad and the Media industry and hopefully the iCloud and the Hardware industry. Today’s innovation has to make strategic sense from an entire ecosystem standpoint. A product, beautifully designed and fully integrated in Apple’s case, has to appeal to both consumers and industry at the same time. The “Build It and They Will Come” time has long faded away and countless of technology companies have and are still making the same mistake of not thinking through the end-to-end solution for buyers.

Speed of Innovation. Despite its 46,600 full-time employees and 137 stores around the world in 2010, Apple is still managed like a startup with a lean management, small and flexible team and clear goals. To execute well and fast, Steve Jobs implemented a strong management style and micromanaged deadlines. Most importantly, by vigorously championing its “integrated” ecosystem (Hardware coupled with Software) against the “fragmented” environment, Steve Jobs established the first “closed” technology platform that could compete fiercely with the “open” Internet. So since Apple controls everything within their 'closed' world, development and go-to-market cycle time is significantly reduced. The Apple method has recently reached its maximum effectiveness and was rewarded by the financial market with a 52% innovation premium on the stock price.

Reinvention of the CEO Role. Like no other, Steve Jobs has redefined the role and expectations of a modern CEO, becoming the ultimate spokesperson, salesperson and marketer for his company and products. Cries of "We love you, Steve!" are emitted at Apple events from fans, and they will surely miss the iconic presence and showmanship of Steve Jobs in the coming product launches. Perhaps he might be able to redefine the role of a modern Chairman of the Board, if his health will permit.

“One more thing”... there will be a before and an after Steve Jobs as CEO at Apple Inc, the same way there is a before and an after Bill Gates as CEO at Microsoft. But in creating beautiful, powerful and simple-to-use devices, Steve Jobs has managed to expand technology beyond the small technophile community and teach the world how to innovate across industries.